Torchmark
Insured
Tax-Free
Fund, Inc.
ANNUAL
REPORT
-------------------------------------------
For the fiscal year ended December 31, 1994
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
DECEMBER 31, 1994
Dear Shareholder:
This report relates to the operation of the Torchmark Insured Tax-Free Fund
for the fiscal year ended December 31, 1994. The following discussion, graphs
and tables provide you with information regarding the Fund's performance during
that period.
Over the past fiscal year, the Federal Reserve Bank raised interest rates
six times as it sought to slow economic growth for the purpose of alleviating
inflationary pressures. As interest rates rose, bonds declined considerably in
value. The rate of inflation remained low during the year and, therefore, bond
yields relative to inflation reached unusually high levels by year end.
Our strategy during the past year was to make investment decisions that
would maximize the Fund's yield from insured tax-free bonds. We chose not to
shorten the average maturity of the Fund's holdings, although that would have
lessened the erosion in principal values caused by rising interest rates,
because then the Fund's monthly yield would have fallen significantly due to the
considerably lower interest rates available on municipal bonds with shorter
maturities. By maintaining a longer average maturity, the Fund has continued to
provide attractive monthly dividends, and as market conditions change for the
better in the future, the Fund is positioned to recoup the declines in principal
value it experienced in 1994.
The strategies and techniques we applied resulted in the direction of the
Fund's performance remaining fairly consistent with that of the indexes charted
on the following page. Those indexes reflect the performance of securities that
generally represent the municipal bond market (the Lehman Brothers Municipal
Bond Index) and the universe of funds with similar investment objectives (the
Lipper Insured Municipal Debt Fund Universe Average).
In 1995, we expect the Federal Reserve Bank to increase interest rates
further until the rate of economic growth slows and fears of rising inflation
abate. We expect, however, that the Federal Reserve Bank's interest-raising
actions are nearing an end. Once the economy slows further, the bond markets,
including the market for municipal bonds, should present good prospects for
appreciation. We expect to continue the same strategies we have recently
employed. We will continue to diversify the Fund's holdings by credit, location
and type of municipal project in seeking to achieve the Fund's investment
objectives.
Thank you very much for your continued support and confidence.
Respectfully,
John M. Holliday
Manager, Torchmark Insured Tax-Free Fund, Inc.
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
TORCHMARK INSURED TAX-FREE FUND, INC.,
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX,
AND THE LIPPER INSURED MUNICIPAL DEBT FUND UNIVERSE AVERAGE
Average Annual Total Return*
1 year 1+ years**
- -8.65% -0.70%
Lipper
Lehman Insured
Torchmark Brothers Municipal
Insured Municipal Debt Fund
Tax-Free Bond Universe
Fund, Inc. Index Average
---------- --------- ----------
02/26/93 Purchase 10,000 10,000 10,000
03/31/93 9,830 9,894 9,888
06/30/93 10,278 10,218 10,208
09/30/93 10,642 10,563 10,560
12/31/93 10,806 10,711 10,666
03/31/94 9,912 10,123 10,030
06/30/94 10,005 10,235 10,086
09/30/94 10,054 10,305 10,121
12/31/94 9,872 10,157 9,975
- ----- Lehman Bros Muni Bond Index -- $10,157
+++++ Lipper Insured Muni Debt Fund Universe Avg -- $9,975
===== Torchmark Insured Tax-Free Fund, Inc.*** -- $9,872
Past performance is not predictive of future performance. Indexes are
unmanaged.
*Performance data quoted represents past performance. Investment return and
principal value will fluctuate and an investor's shares, when redeemed, may
be worth more or less than their original cost.
**2-26-93 (the date the Fund commenced operations) through 12-31-94. Torchmark
Corporation guarantees that Fund expenses will not exceed one percent of net
assets for at least the first three years of operation (beginning 2-26-93).
The returns shown above would have been lower without this assumption of
expenses.
***The value of the investment in the Fund is impacted by the ongoing expenses
of the Fund.
<PAGE>
THE INVESTMENTS OF
TORCHMARK INSURED TAX-FREE FUND, INC.
DECEMBER 31, 1994
Principal
Amount in
Thousands Value
MUNICIPAL BONDS
ALABAMA - 4.11%
The DCH Health Care Authority, Health
Care Facilities Revenue Bonds,
Series 1993-A,
5.5%, 6-1-2013 ........................ $100 $ 88,750
ARIZONA - 3.14%
Paradise Valley Unified School District
No. 69 of Maricopa County, Arizona,
Refunding Bonds, Second Series 1993,
0.0%, 7-1-2007 ........................ 150 67,688
CONNECTICUT - 4.35%
Connecticut Housing Finance Authority,
Housing Mortgage Finance Program Bonds,
1993 Series B,
6.0%, 5-15-2009 ....................... 100 93,875
FLORIDA - 4.57%
City of Jacksonville, Florida, Excise
Taxes Revenue Bonds, Series 1993,
0.0%, 10-1-2011 ....................... 300 98,625
ILLINOIS - 16.23%
Illinois Health Facilities Authority:
Revenue Refunding Bonds, Series 1993A
(Elmhurst Memorial Hospital),
5.5%, 1-1-2013 ........................ 100 86,375
Hospital Revenue Refunding Bonds,
Series 1993 (Delnor-Community Hospital),
5.5%, 5-15-2013 ....................... 100 86,250
Northwest Suburban Municipal Joint Action
Water Agency (Cook, DuPage and Kane
Counties, Illinois), Water Supply
System Revenue Bonds, Series 1993A,
5.9%, 5-1-2013 ........................ 100 91,375
City of Chicago, Wastewater Transmission
Revenue Bonds, Refunding Series 1993,
5.375%, 1-1-2013 ...................... 100 86,250
Total ................................. 350,250
IOWA - 4.18%
City of Ames, Iowa, Hospital Revenue
Bonds (Mary Greeley Medical Center
Project), Series 1993,
5.7%, 8-15-2012 ....................... 100 90,250
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
TORCHMARK INSURED TAX-FREE FUND, INC.
DECEMBER 31, 1994
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MICHIGAN - 6.66%
Huron School District, Counties of Wayne
and Monroe, State of Michigan, 1992
Refunding Bonds (General Obligation -
Unlimited Tax),
0.0%, 5-1-2013 ........................ $340 $ 99,450
Godfrey-Lee Public Schools, County of
Kent, State of Michigan, 1993 Refunding
Bonds (General Obligation - Unlimited Tax),
5.5%, 5-1-2013 ........................ 50 44,125
Total ................................. 143,575
MISSOURI - 2.24%
Excelsior Springs, Missouri, School
District Building Corporation, Leasehold
Revenue Bonds (Excelsior Springs 40
District of Excelsior Springs, Missouri),
Series 1994,
0.0%, 3-1-2012 ........................ 150 48,188
NEVADA - 8.90%
Clark County School District, Las Vegas,
Nevada, General Obligation (Limited Tax)
Refunding Bonds, Series 1991B,
0.0%, 3-1-2009 ........................ 250 98,438
Clark County Nevada, Las Vegas - McCarran
International Airport, Passenger Facility
Charge Revenue Bonds, 1992 Series B,
6.25%, 7-1-2011 ....................... 100 93,625
Total ................................. 192,063
OHIO - 4.17%
Ohio Water Development Authority, State
of Ohio, Water Development Revenue
Refunding Bonds, Pure Water Refunding
and Improvement Series,
5.5%, 12-1-2011 ....................... 100 90,000
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
TORCHMARK INSURED TAX-FREE FUND, INC.
DECEMBER 31, 1994
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
PENNSYLVANIA - 8.12%
County of Allegheny, Pennsylvania, Airport
Revenue Bonds, Series 1993C (Pittsburgh
International Airport),
5.625%, 1-1-2013 ...................... $100 $ 87,750
Berks County Municipal Authority,
Berks County, Pennsylvania, College
Revenue Bonds, Series of 1993
(Albright College),
5.1%, 10-1-2008 ....................... 100 87,500
Total ................................. 175,250
SOUTH DAKOTA - 4.19%
Sioux Falls School District 49-5,
Sioux Falls, South Dakota, Refunding
Capital Outlay Certificates of 1992,
Series 1992B (Limited Tax Obligation),
5.75%, 7-1-2012 ....................... 100 90,375
TEXAS - 8.77%
Tarrant County Water Control and
Improvement District Number One
(Tarrant County, Texas), Water Revenue
Refunding and Improvement Bonds,
Series 1992,
5.75%, 3-1-2013 ....................... 100 99,750
City of Austin, Texas, Combined Utility
Systems Revenue Refunding Bonds, Series 1992A,
5.75%, 11-15-2014 ..................... 100 89,500
Total ................................. 189,250
UTAH - 4.18%
Salt Lake City, Salt Lake County, Utah,
Airport Revenue Bonds, Series 1993A (AMT),
6.0%, 12-1-2012 ....................... 100 90,125
VIRGINIA - 2.96%
County of Stafford, Virginia, Refunding
Certificates of Participation,
Series 1994,
5.0%, 11-1-2009 ....................... 75 63,844
WASHINGTON - 8.24%
Public Utility District No. 1 of Snohomish
County, Washington, Generation System
Revenue Bonds, Series 1993,
6.0%, 1-1-2013 ........................ 100 93,000
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
TORCHMARK INSURED TAX-FREE FUND, INC.
DECEMBER 31, 1994
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
WASHINGTON (Continued)
Washington Public Power Supply System,
Nuclear Project No. 2, Refunding
Revenue Bonds, Series 1994A,
5.0%, 7-1-2009 ........................ $100 $ 84,750
Total ................................. 177,750
TOTAL MUNICIPAL BONDS - 95.01% $2,049,858
(Cost: $2,276,188)
TOTAL SHORT-TERM SECURITIES - 3.94% $ 85,000
(Cost: $85,000)
TOTAL INVESTMENT SECURITIES - 98.95% $2,134,858
(Cost: $2,361,188)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.05% 22,729
NET ASSETS - 100.00% $2,157,587
Notes to Schedule of Investments
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 4 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
TORCHMARK INSURED TAX-FREE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994
Assets
Investment securities - at value
(Notes 1 and 4) ................................. $2,134,858
Cash ............................................ 4,254
Receivables:
Interest ........................................ 31,557
Fund shares sold ................................ 25
Unamortized organization expenses (Note 2) ....... 24,206
----------
Total assets .................................. 2,194,900
----------
Liabilities
Organization expenses payable .................... 24,206
Accrued accounting services fee ................... 833
Dividends payable ................................ 295
Payable for Fund shares redeemed ................. 78
Other ............................................ 11,901
----------
Total liabilities ............................. 37,313
----------
Total net assets.............................. $2,157,587
==========
Net Assets
$0.01 par value capital stock, authorized --
200,000,000; shares outstanding -- 238,835
Capital stock ................................... $ 2,388
Additional paid-in capital ...................... 2,382,145
Accumulated undistributed loss:
Accumulated undistributed net realized loss on
investment transactions ....................... (616)
Net unrealized depreciation in value of
investments at end of period ................... (226,330)
----------
Net assets applicable to outstanding units
of capital ................................... $2,157,587
==========
Net asset value, redemption and offering price
per share (net assets divided by
shares outstanding) .............................. $9.03
=====
See notes to financial statements.
<PAGE>
TORCHMARK INSURED TAX-FREE FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended DECEMBER 31, 1994
Investment Income
Interest ......................................... $ 130,158
---------
Expenses (Notes 2 and 3):
Registration fees ............................... 15,078
Investment management fee ....................... 11,069
Accounting services fee ......................... 10,000
Amortization of organization expenses ........... 7,644
Distribution fee ................................ 5,536
Shareholder reports.............................. 2,898
Taxes ........................................... 2,700
Transfer agency and dividend disbursing ......... 2,245
Legal fees ...................................... 2,181
Audit fees ...................................... 2,000
Custodian fees .................................. 671
Other ........................................... 85
---------
Total ......................................... 62,107
Less expenses in excess of limitation ......... (40,076)
---------
Total expenses ............................... 22,031
---------
Net investment income ...................... 108,127
---------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on investments ................. 5,729
Unrealized depreciation in value of investments
during the period ............................... (317,448)
---------
Net loss on investments ......................... (311,719)
---------
Net decrease in net assets resulting
from operations .............................. $(203,592)
=========
See notes to financial statements.
<PAGE>
TORCHMARK INSURED TAX-FREE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
fiscal period from
year February 26,
ended 1993 through
December December
31, 1994 31, 1993
----------- -----------
Increase (Decrease) in Net Assets
Operations:
Net investment income ............... $ 108,127 $ 82,132
Realized net gain (loss) on
investments ....................... 5,729 (217)
Unrealized appreciation
(depreciation) .................... (317,448) 91,118
---------- ----------
Net increase (decrease) in net
assets resulting from
operations ....................... (203,592) 173,033
---------- ----------
Dividends to shareholders from:*
Net investment income ............... (108,127) (82,132)
Realized net gain from investment
transactions ...................... (6,128) ---
---------- ----------
(114,255) (82,132)
---------- ----------
Capital share transactions:
Proceeds from sale of shares
(4,202 and 206,433
shares, respectively) ............. 42,096 2,065,047
Proceeds from reinvestment of
dividends and/or capital gains
distribution (11,947 and 8,085
shares, respectively) ............. 112,779 82,019
Payments for shares redeemed (1,832
and 0 shares, respectively) ....... (17,408) ---
---------- ----------
Net increase in net assets
resulting from capital
share transactions ............... 137,467 2,147,066
---------- ----------
Total increase (decrease) ........ (180,380) 2,237,967
Net Assets
Beginning of period .................. 2,337,967 100,000
---------- ----------
End of period ........................ $2,157,587 $2,337,967
========== ==========
Undistributed net investment
income ............................ $--- $---
==== ====
*See "Financial Highlights" on page 11.
See notes to financial statements.
<PAGE>
TORCHMARK INSURED TAX-FREE FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the
period
For the from
fiscal February
year 26, 1993
ended through
December December
31, 1994 31, 1993
------- -------
Net asset value,
beginning of
period ........... $10.41 $10.00
------ ------
Income from investment
operations:
Net investment
income .......... .46 .38
Net realized and
unrealized gain
(loss) on
investments ..... (1.35) .41
------ ------
Total from investment
operations ....... (0.89) .79
------ ------
Less distributions:
Dividends from net
investment income (0.46) (0.38)
Distribution from
capital gains ... (0.03) (0.00)
------ ------
Total distributions. (0.49) (0.38)
------ ------
Net asset value,
end of period .... $ 9.03 $10.41
====== ======
Total return ....... -8.65% 9.62%*
Net assets, end of
period (000
omitted) .......... $2,158 $2,338
Ratio of expenses
to average net
assets** ......... 1.00% 1.00%*
Ratio of net investment
income to average
net assets ....... 4.88% 4.46%*
Portfolio turnover
rate .............. 5.18% 79.14%*
*Annualized.
**See Note 3 for voluntary assumption of Fund expenses by Torchmark Corporation.
The ratios of expenses to average net assets shown in the table would have
been 2.80% and 2.30%, respectively.
See notes to financial statements.
<PAGE>
TORCHMARK INSURED TAX-FREE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1 -- Significant Accounting Policies
Torchmark Insured Tax-Free Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- Municipal bonds and the taxable obligations in the
Fund's investment portfolio are not listed or traded on any securities
exchange. Therefore, municipal bonds are valued using prices quoted by
Muller and Company, a dealer in bonds which offers a pricing service.
Short-term debt securities, whether taxable or nontaxable, are valued at
amortized cost, which approximates market.
B. Security transactions and related investment income -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Securities gains and losses are calculated on the
identified cost basis. Original issue discount (as defined by the Internal
Revenue Code) and premiums on the purchase of bonds are amortized for both
financial and tax reporting purposes over the remaining lives of the bonds.
Interest income is recorded on the accrual basis. See Note 4 -- Investment
Security Transactions.
C. Federal income taxes -- The Fund intends to distribute all of its net
investment income and capital gains to its shareholders and otherwise
qualify as a regulated investment company under the Internal Revenue Code.
The Fund intends to pay distributions as required to avoid imposition of
excise tax. Accordingly, provision has not been made for Federal income
taxes. In addition, the Fund intends to meet requirements of the Internal
Revenue Code which will permit it to pay dividends from net investment
income, substantially all of which will be exempt from Federal income tax.
See Note 5 -- Federal Income Tax Matters.
D. Dividends and distributions -- All of the Fund's net investment income is
declared and recorded by the Fund as dividends payable on each day to
shareholders of record at the time of the previous determination of net
asset value.
NOTE 2 -- Organization
The Fund was incorporated in Maryland on September 9, 1992 and was inactive
(except for matters relating to its organization and registration as an
investment company under the Investment Company Act of 1940 and registration of
shares under the Securities Act of 1933) until February 26, 1993 (the date of
the initial public offering).
On February 17, 1993, Waddell & Reed, Inc. ("W&R") purchased for investment
10,000 shares of the Fund at their net asset value of $10.00 per share. As of
December 31, 1994, W&R owned 10,901 shares. On February 26, 1993, United
Investors Life Insurance Company ("UILIC"), an affiliate of W&R, purchased
200,000 shares of the Fund. As of December 31, 1994, UILIC owned 218,020
shares.
The Fund's organizational expenses in the amount of $38,220 were advanced
to the Fund by W&R and are an obligation to be paid by the Fund. These expenses
are being amortized and are payable evenly over 60 months following the date of
the initial public offering. In the event that all or any part of W&R's initial
investment in the Fund's shares is redeemed before the full reimbursement of
these organizational expenses, the Fund's obligation to make further
reimbursement will cease.
NOTE 3 -- Investment Management and Payments to Affiliated Persons
Waddell & Reed Investment Management Company ("WRIMCO"), a wholly-owned
subsidiary of W&R, acts as investment manager to the Fund and, as such, receives
a fee for such services. The fee is accrued and paid daily at the annual rate
of .50% of the Fund's net asset value.
The Torchmark Division of Waddell & Reed Services Company ("Torchmark
Services"), another wholly-owned subsidiary of W&R, acts as transfer agent for
the Fund and processes the payments of dividends to Fund shareholders. The Fund
pays Torchmark Services a monthly fee of $1.0208 for each shareholder account
that was in existence at any time during the prior month, plus $0.30 for each
account on which a dividend or distribution of cash or shares had a record date
in that month. The Fund also pays for certain out-of-pocket costs.
Torchmark Services also acts as agent ("Accounting Services Agent") in
providing bookkeeping and accounting services and assistance to the Fund and
pricing daily the value of shares of the Fund. For these services the Fund pays
the Accounting Services Agent a monthly fee of one-twelfth of the annual fee
shown in the following table:
Accounting Services Fee
Average Net Asset Level Annual Fee
(dollars in millions) Rate for Each Level
----------------------- -------------------
From $ 0 to $ 25 $ 10,000
From $ 25 to $ 100 $ 25,000
From $ 100 to $ 500 $ 50,000
From $ 500 to $1,000 $ 75,000
Above $1,000 $100,000
Under a Service Plan adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund may pay a fee to Torchmark
Distributors, Inc. ("Torchmark Distributors"), another wholly-owned subsidiary
of W&R, the principal underwriter for the Fund, and to Torchmark Services in an
aggregate amount not to exceed .25% per annum of the Fund's net asset value
accrued and paid daily to reimburse them for amounts expended in preparing,
printing and distributing informational material to investors and Fund
shareholders, providing yield and performance information and in answering
telephone or written inquiries of investors concerning the Fund or shareholders
concerning their accounts.
Torchmark Corporation guarantees that for at least the first three years
commencing February 26, 1993, the total expenses of the Fund, excluding
brokerage commissions and extraordinary expenses, will not exceed 1% annualized
of the Fund's daily net asset value. To ensure that the Fund's daily expenses
do not exceed this limit, first WRIMCO, Torchmark Distributors and Torchmark
Services will waive or refund fees payable to them commencing with the service
fee; then, if such reductions or refunds are inadequate to reduce the daily
expenses below the 1% annualized limit, Torchmark Corporation will immediately
pay to the Fund the amount by which the Fund's expenses computed daily exceed
the 1% limit.
W&R is an indirect subsidiary of Torchmark Corporation, a publicly held
company whose address is 2001 Third Avenue South, Birmingham, Alabama 35233.
Torchmark Corporation is an insurance and financial services holding company
whose shares are listed on the New York Stock Exchange. W&R is also an indirect
subsidiary of United Investors Management Company, a holding company, and a
direct subsidiary of Waddell & Reed Financial Services, Inc., a holding company.
NOTE 4 -- Investment Security Transactions
Purchases of investment securities, other than U.S. Government and short-
term securities, aggregated $217,884 while proceeds from maturities and sales
aggregated $109,019. Purchases of short-term securities aggregated $385,000
while proceeds from maturities and sales aggregated $368,977. No U.S.
Government securities were bought or sold during the period ended December 31,
1994.
For Federal income tax purposes, cost of investments owned at December 31,
1994 was $2,361,804, resulting in net unrealized depreciation of $226,946, of
which $1,658 related to appreciated securities and $228,604 related to
depreciated securities.
NOTE 5 -- Federal Income Tax Matters
During the year ended December 31, 1994, the Fund realized short-term
capital gain net income of $5,728 which is treated as ordinary income for
Federal income tax purposes.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Torchmark Insured Tax-Free Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Torchmark Insured Tax-Free Fund,
Inc. (the "Fund") at December 31, 1994, the results of its operations for the
year then ended and the changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at December 31, 1994 by correspondence with the
custodian, provides a reasonable basis for the opinion expressed above. The
financial statements and financial highlights of the Fund for the period ended
December 31, 1993 were audited by other independent accountants whose report
dated February 18, 1994 expressed an unqualified opinion on those statements.
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 31, 1995
<PAGE>
- ----------------------------------------------------------------------
INCOME TAX INFORMATION
Dividends are declared and reported by the Fund on each day the New York
Stock Exchange is open for business. Dividends are paid monthly on the 27th of
the month or on the preceding business day if the 27th is a weekend or holiday.
The dividends are not eligible for the dividend received deduction.
The tax status of dividends paid will be reported to you on Form 1099-DIV
after the close of the applicable calendar year.
Shareholders are advised to consult with their tax advisor concerning the tax
treatment of dividends and distributions from the Fund.
<PAGE>
DIRECTORS OFFICERS
Ronald K. Richey, Birmingham, Keith A. Tucker, President
Alabama, Chairman of the Board Robert L. Hechler, Vice
Henry L. Bellmon, Red Rock, President
Oklahoma Henry J. Herrmann, Vice
Dodds I. Buchanan, Boulder, Colorado President
Jay B. Dillingham, Kansas City, John M. Holliday, Vice
Missouri President
John F. Hayes, Hutchinson, Kansas Theodore W. Howard, Vice
Glendon E. Johnson, Miami, Florida President and Treasurer
William T. Morgan, Los Angeles, Sharon K. Pappas, Vice
California President and Secretary
Doyle Patterson, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
President
Frederick Vogel, III, Milwaukee,
Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
<PAGE>
This report is submitted for the general information of the shareholders of
Torchmark Insured Tax-Free Fund, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
Torchmark Insured Tax-Free Fund, Inc. current prospectus.
<PAGE>
This space available for your notes and calculations.
<PAGE>
TORCHMARK INSURED TAX-FREE FUND, INC.
December 31, 1994
FOR MORE INFORMATION:
TORCHMARK SERVICES
6300 Lamar Avenue
P.O. Box 2995
Shawnee Mission, KS 66201-1395
(800) 733-3863
FOOO299A(12-94)
